Bahrain Bond Rally Fizzles Out as Gulf Bailout Remains Elusive - Bloomberg

Bahrain Bond Rally Fizzles Out as Gulf Bailout Remains Elusive - Bloomberg:

Bondholders’ relief over a Gulf pledge to prop up Bahrain’s struggling economy has given way to anxiety now that three weeks have passed without any sign aid is on the way.

Saudi Arabia, Kuwait and the United Arab Emirates are waiting for Bahrain to submit its proposal for economic reforms before giving any money to the cash-strapped nation, according to three people familiar with the issue, who declined to be identified because of the sensitivity of the discussions. While other Gulf nations scrambled to cope with falling oil prices, Bahrain has been slow to implement policy changes and attract foreign investment.

Its rich neighbors pledged last month to consider all options to reduce Bahrain’s ballooning debt and shore up its foreign-exchange reserves to help avoid a currency devaluation. That eased concerns of a default and fueled a record jump in Bahrain’s dollar-denominated bonds. The rally has fizzled in the past week as investors look for signs the deal will hold.